Sensex jumps 300 points on hopes of Fed rate hike pause, firm global cues

Indian equity indices opened higher for the second straight session on Monday, following gains in the broader Asian market, as mixed US jobs data bolstered expectations that the US Fed may skip an interest rate hike later this month.

The BSE Sensex was trading 348 points or 0.56% higher at 62,895. Nifty50 was trading at 18,628, down 94 points or 0.51% at around 9.18 am.

From the Sensex pack, Mahindra and Mahindra, ICICI Bank, and Wipro were the top gainers, rising over 1% each. Power Grid, HCL Tech, Bajaj Finserv, Axis Bank, Bajaj Finance, and Tata Motors also opened higher. On the other hand, only Nestle, Tech Mahindra, and Asian Paints opened lower.

SBI Life Insurance shares also opened higher after Insurance regulator IRDAI directed that the policyholder-related assets and liabilities of Sahara India Life Insurance be transferred to SBI Life.

On the sectoral front, Nifty Financial Services surged 0.62%, and Nifty Bank rose 0.56%. FMCG, IT, media, metal, pharma, realty, and healthcare sectors opened with gains. In the broader market, Nifty Midcap 100 rose 0.44% and Nifty Smallcap 100 gained 0.60%.

Experts View
"Market is poised to break out of the range of 18300-18600. Nifty has moved up by 9.5% from the March lows and the market momentum is strong. Macro news flows are positive for a breakout of the upper range," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

"Even though banking is a crowded trade, the sector will remain resilient since interest rates have peaked and credit growth continues to be robust. Autos have the potential to outperform since there are clear signs of revival in demand," Nair said.

Deven Mehata, Equity Research Analyst at Choice Broking, said, "The charts indicate that the Nifty may get support at 18,450, followed by 18,400 and 18,350. If the index advances, 18,650 would be the initial key resistance level to watch out for, followed by 18,700 and 18,750."

Asian Markets
Most Asian stock markets extended a global rally on Monday on optimism the Federal Reserve would pause its rate hikes this month after a mixed US jobs report. Hong Kong's Hang Seng index rose 0.6% while China's blue-chips underperformed with a drop of 0.4%. Japan's Nikkei surged 1.7% to stand above 32,000 for the first time since July 1990.

Oil rises
Oil jumped on Monday after Saudi Arabia pledged big output cuts. Brent oil rose 1% to $76.89 a barrel, giving up some of its earlier gains to as high as $78.73, while US crude climbed 1.2% to $72.61 a barrel, after hitting a session high of $75.06.

Oil prices have recently come under pressure amid heightened concerns about China's slowing economic recovery.

Rupee falls
The Indian rupee declined 13 paise to Rs 82.52 on Monday, tracking the move higher on the US dollar and US yields following the jobs report. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, rose 0.09% to 104.1 level.

FIIs tracker
Meanwhile, foreign institutional investors sold Rs 659 crore worth of Indian equities on Friday, while domestic investors bought Rs 582 crore of shares on a net basis, as per provisional NSE data.

(With inputs from agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)